Influences on Marketing Flashcards
1
Q
Four factors influencing customer choice
A
- Psychological influences
- Sociocultural influences
- Economic influences
- Government influences
2
Q
What are pyschological influences on customer choice
A
- Person’s individual characteristics that influence their buying decisions
3
Q
What are the 5 main psychological influences
A
- Perception: Process through which people select and interpret information to create meaning. Hence marketing managers must create a positive/favourable perception of their product in the mind of the customer.
- Motives: The reason that makes an individual do something. Main motives that influence customer choice include comfort, health, safety, ambition, taste and pleasure. Advertising attempts to motivate customer to buy the product.
- Attitudes: Person’s overall feeling about an object or activity
- Personality/self‐image: Personality consists of behaviours/characteristics and self-image is how a person views him/herself.
- Learning (past experiences): change in individuals behaviour caused by information and past experiences. Successful marketing encourages positive learning which leads to brand loyalty
4
Q
What are sociocultural influences
A
- Sociocultural influences are forces exerted by other people and groups that affect customer behaviour.
5
Q
What are the 4 main sociocultural influences
A
- Social class/socio economic status: determined by education, income and occupation. Influences type, quality and quantity of products a customer buy.
- Culture: and subculture consist of learned values, beliefs, behaviours and traditions shared by a society. Influences buying behaviour through influencing everyday life. E.g. society’s shift towards healthy food.
- Family and roles: each individual occupy different roles within their family and wider community. E.g. study found 30% of 600 children surveyed said parents asked them for advice when purchasing family car.
- Peer group: the group of people whom a person identifies with, groups values and beliefs may influence buying behaviour.
6
Q
What are economic influences
A
- Economic conditions include: interest rates, economic cycle, inflation, employment levels and economic growth
- Mainly dictated by economic cycle
- Boom (upswing) consumer spending high, unemployment low. Marketing potential is high.
- Bust (downturn) consumer spending low, employment low. Marketing plan should be adapted and concentrate on maintaining market share survival becomes main business goal.
7
Q
How does govt influence consumer choice
A
- The government sets income tax rates and redistributes income amongst the economy and therefore influences a person’s ability to make purchases
8
Q
Govt and Apple
A
- 2014 the launch of 6 and 6 plus were delayed for Chinese customers due to govt concerns regarding Apple devices and issues surrounding privacy and accessibility.
9
Q
What is purposes of CCA 2010
A
- Protect consumers against undesirable/unfair practices (e.g. misleading and deceptive advertising)
- Regulate certain trade practices that restrict competition. i.e. break-up oligopolies, limit collusion.
10
Q
Who enforces CCA
A
- Enforced by the Australian Competition and Consumer Commission (ACC) established 1995 and
- the Australian Securities and Investments Commission (ASIC)
11
Q
What are Undesirable & Misleading Practices which are illegal under the CCA:
A
- Deceptive and misleading advertising
- Price discrimination
12
Q
What are examples of deceptive and misleading advertising
A
- ‘bait-and-switch’: advertising a few products at reduced prices to attract customers. When the advertised products quickly run out, customers are directed to higher priced items)
- Dishonest advertising: using words that are deceptive or claim that a product has some specific quality it does not.
13
Q
Example of misleading advertising
A
- Dec, 2017 – makers of Nurofen were fined $6 million (plus ACCC’s legal costs) for misleading consumers.
- ACCC took Reckitt Benckiser to court alleging that their specific pain products were similar to the other standard Nurofen tablets, containing the same active ingredient and hence not more effective at treating the specific type of pain described on their packaging and was therefore misleading and often double the price!
- This was the highest fine awarded under ACL by the Federal Court due to the substantial consumer loss suffered and the need for deterrence.
14
Q
What is price discrimination
A
- Price discrimination is the setting of different prices for identical products in different markets or among different groups of customers
15
Q
Example of price discrimination
A
- 2017 Uber introduced a form of price discrimination into how its fares are calculated which exploits a consumer’s ‘willingness to pay’ (WTP) à the maximum amount a consumer would pay for a particular good or service.
- Uber’s main way they exploit this is through ‘surge pricing’ where fares become more expensive in busy periods and now geographic price discrimination where people travelling to wealthy areas may be charged more.
- Will be allowed as does not hinder competition may result in better outcomes for consumers.
